What Is a Premium Domain and Where to Buy One?

Prologue

Once upon a time, in the early 90s, when domains were a novelty, the vast majority of domains were unregistered. For clarity, an unregistered domain is a domain that hasn’t been purchased by an individual or company. Unlike premium domains, unregistered domains do not carry a premium price. To purchase an unregistered domain, one simply has to pay the yearly registration fee set by the domain registrar; around $20 p/y. The registration fee is always the same, regardless of the value of a domain. Back to our story…

So what happened in the 90s? Some forward-thinking companies and entrepreneurs thought it would be a good idea to register easy-to-remember and descriptive domains. Their hypothesis was simple and founded on the belief that the internet would become mainstream and that companies would want a brandable and memorable web address for their business. Were they right? Well, I think we know the answer… The internet blossomed, and the world became interconnected ushering in the digital age of business. In the 90s, fortunes were made. Early domain investors struck gold. At the same time, just about every short, descriptive, and memorable domain in the English dictionary was registered.

Fast forward 30 years, and it’s now 2024 as I write this article. The premium domain is a matured asset and is recognized by technologists and beyond. In today’s digital landscape, what defines a premium domain, and do they still carry the same importance?

In this article, I will do my best to answer these questions. Although our team is small, we do have a combined 60+ years of experience in the domain and branding industry. It’s a pleasure to share this insight.

Features of a Premium Domain

In the digital world, a premium domain is the equivalent of a great address. It is the location, location, location of the internet! Here are 5 characteristics that define a great address.

Memorable

Easy-to-remember is the most important characteristic of a great domain, and by extension, brand name.

How often have you found yourself asking the question: “What was the name of that company?…”. The harder the name is to remember, the more expensive it is to advertise.

On the other hand, a memorable brand name can help improve the effectiveness of ad campaigns, facilitate communication, and enhance brand recall.

Short

It’s safe to say, the shorter, the better. Shorter names are easier to share and remember. They’re also prestigious. Most technologists and entrepreneurs know that short domains command a premium, and owning one is a trust indicator and quite the flex! Short domains are:

4-Letters

4-letters is the sweet spot for branding and domains. Ben Affleck, acting as Phill Knight in Air, famously mentioned that he chose Nike because consumers like 4-letter brands. To this day, 4-letter domains remain an affordable and valuable option for up-and-coming companies.

3-Letters

3-letters is the non-plus-ultra of branding and domains. Consider CAT, GAP, and MTV. Any 3-letter domain combination with a meaning and .com extension is priceless and extremely rare.

2-Letters

There are only 676 combinations of 2-letter domains. In some cases, the domains are used as acronyms. For instance, Burger King uses BK.com, American Airlines uses AA.com, and British Airways uses BA.com. 2-letter domains are also popular among high-end domain investors.

1-Letter

They’re only 3 in the world! Q.com, Z.com, and X.com. I guess that Elon is not selling at any price!

.com

The .com extension is globally recognized and favored by major companies worldwide.

If you browse through a list of the most visited websites in the world, Dow Jones, and even the S&P 500 companies, you will notice that the common denominator is .com.

If you’re targeting the US and global markets, .com is the safest option.

Finding a great .com domain is not an easy task, and not everyone can afford one. So there is a tremendous drive to look for alternative extensions. That’s why more than 1500 TLDs were created. Side note, a TLD is the technical term for domain extension. Here are some examples of new TLDs: .aero, .agency, .auto, .bike, .builders, .coffee, .theater, .theatre, .uno, .xyz, etc… The adoption rate of companies for most of these extensions is extremely low and you risk being perceived as spam or simply not understood.

There is also the push to use ccTLD or country-level extensions. Popular extensions include .io, .ai, and .co. They are the country-level domains of the British Indian Ocean Territory, Anguilla, and Columbia. Our observation is that they are preferable to some of the new TLDs but carry an inherent risk and are not as recognized as .com.

Easy Spelling & Pronunciation

If you must explain your domain name, you will have to invest more in advertising to clarify and make sure it’s communicated correctly.

The harder you make your clients work to remember your web address, the more expensive each client becomes for you.

Misspellings can be interesting, but the domain must be short, and the typo must be obvious. A good example would be LYFT.com.

Noteworthy: Did you know that twitter.com rebranded from twttr.com and instagram.com rebranded from instagr.am?

Keywords

Not a rule of thumb, but domains consisting of keywords related to your industry can help improve brand association.

For example, hotels.com is a hotel booking platform. A domain like hotels.com is easy to remember and effortlessly describes the service. A company can leverage this marketing advantage to improve the effectiveness of advertising campaigns and minimize advertising costs.

Keyword-rich domains are referred to as “exact match” domains. They are priceless, and in most cases, developed into established businesses.

Benefits of Investing in a Premium Domain

Better Return on Ad Spend

Memorable domains improve the effectiveness of advertising campaigns by effortlessly communicating your brand, product, or service.

Some of the clear financial benefits include:

• Improved word-of-mouth
• Better clickthrough and cost-per-click rates
• Easier client conversions
• Lower customer acquisition cost
• Higher customer retention
• SEO advantage

It is arguably better to invest in a great domain than plow funds into a hard-to-remember domain.

Trust & Credibility

A great domain leaves a positive and long-lasting first impression. It signals confidence in the business, it’s elegant and prestigious and appeals to consumers.

You never get a second chance to make a first impression. Make the first count.

Higher Company Valuation

A great domain and by extension brand enhances the perceived value of the service or product and company. In the long term, this creates financial value and goodwill.

Consider the brand value of the companies listed below, before and after their rebrand.

How to Value a Premium Domain?

Domains draw many similarities to real estate. That’s why their often referred to as digital real estate. I think it’s easy to visualize domains as digital plots of land. However, unlike real estate which is valued using comps, every domain is unique.

How does one calculate the value of a domain? Was Tesla.com worth $11 million, and does that mean that Edison.com is also worth $11 million? Are there any comparables? For Tesla Motors, the investment was worth it, but for another organization, it may not have been.

Therefore, we propose you ask yourself a question. “Is the investment in a premium domain worth it for my business?” Here are some considerations.

Brand Protection

Whoever owns the .com controls the narrative. Consider the scenario where another business acquires your desired .com domain. It’s off the market forever.

If you share the same brand name with another company, you risk customers ending up on another site, part of your advertising budget working for another business, and even losing confidential emails.

New Markets

Country extensions only work in local markets. The .com extension is recognized, understood, and trusted worldwide.  

If your domain name has a country extension (.co.uk, .com.au, .de, .ch, .fr, etc.) and you expand into foreign markets, you will either need to rebrand to .com or purchase a local domain for each market.

On the other hand, doing business with an unpopular extension like .engineering, .house, .credit, or “.whatever” carries the risk of confusing your customer and being perceived as untrustworthy. 

Noteworthy: The less tech-savvy and geographically dispersed your customer base is, the more important the .com extension becomes. Could you ever imagine Amazon using .io? 

Company Growth 

When choosing a brand name, one should consider choosing a name that can accommodate the company’s future growth.    

For instance, BestTravelInsurance.com may be a good low-cost domain to sell travel insurance, which is great if that’s the niche, however, it would not accommodate the sale of other insurance products.

Therefore, if your company introduces a new service or product while operating under a domain name that defines and limits the business, you run the risk of fragmenting your brand – having to create new websites for additional services and products.

Advertising Spend

I will quote the CEO of Cars.com.

Cars.com is a pretty easy domain name to type in. We get a majority of our traffic directly and organically, which allows us to really invest in other things, which to us is product innovation as opposed to what a lot of our peers have to do is, is they have to keep spending marketing every dollar every day just to stay relevant.

Alex Vetter, co-founder and CEO of Cars.com

The harder your domain is to understand, remember, spell, and pronounce, the more expensive acquiring new customers becomes.

When put side by side, the advertising campaigns with a memorable premium domain outperform ones with a forgettable domain.

Observe the highly competitive online travel business, and notice that there are three unforgettable brands: Hotels.com, Booking.com, and Trip.com.

Trip.com and Hotels.com were 8-figure acquisitions. A significant investment even by cTrip’s and Expedia’s standards, however, consider how much money was saved on advertisement thanks to their sticky and descriptive domains.

Poor brand names and domains are usually leaky buckets. 

Trust & Creditbility 

Your domain is often the first touchpoint a client will have with your business. 

Owning a premium domain name signals stability and confidence. It conveys that the business is serious and in for the long run. For consumers, this creates trust.

Operating with a second-class domain may jeopardize a business’s image, and you risk being perceived as cheap, untrustworthy, underfinanced, or late to the game.  

Lost Company Valuation

Having a great brand with a matching premium domain name creates goodwill. It adds value to the company.

In a world where perception and branding play such an important role, consider the lost valuation for a business going public with a second-class brand and domain.

Fun fact! $872 million was the intangible value of the domain cars.com in the company’s IPO.

Where to Buy Premium Domains

As mentioned in the prologue, a premium domain is purchased on the aftermarket. There are 2 mediums to purchase a registered domain. The first is directly from the owner. In some cases, domain owners list their domains for sale online as well as their contact details. The second is through an intermediary (like us) or marketplace. Below, are 9 places to look for premium domains, and a few words about each option.

VERYL

Yes, this is us! VERYL represents a curated list of premium domains for sale. Our selection is exclusive and carefully vetted for brand-ability and resonance. On our website, you can browse domains by price range, by category, and by industry.

Hilco Digital Assets

Hilco Digital Assets is a leading advisor and investor in ultra-premium .com domain names. The company is led by Andrew Miller, an experienced domain advisor and entrepreneur.

SEDO

SEDO is one of the oldest domain marketplaces in the industry. Today, the platform has a few exceptional domains but the vast majority of domains are of questionable value. The UI is pretty outdated, but with a little effort, one may find a valuable domain.

MediaOptions

MediaOptions is a domain brokerage service. They can assist you in purchasing and selling domains. On their website, you can also scroll through a list of their domains for sale.

Evergreen

Evergreen is a small team of domain brokers. They specialize in 1-word .com domains and have quite a selection of their website.

Brandforce

Brandforce has a collection of premium domains for sale. On their website, you will find a few exceptional domains that may suit your business.

Oxley

Oxley is the world’s most valuable private collection of premium domains. The collection was started by Brent Oxley, the founder of HostGator.

Names.com

Not to be confused with Name.com which is one of the most popular domain registrars, names.com has a small list of exceptional domains for sale.

BestWeb

BestWeb has some top-tier domains available for sale, including some that may be well-suited to Asian startups.

Brand & Domain Strategy

A valuable brand comes with an easy-to-remember name and a matching .com domain. The .com domain is an intrinsic part of creating a brand in a digital world. 

Merging our branding and domain expertise, we work tirelessly with a singular objective: crafting a brand that leaves a lasting and memorable impression.

For any domain and branding inquiries, please don’t hesitate to contact us.